Amazon Business has made its first major inroad into the UK public sector in a deal worth up to £600m.
YPO, a buying organisation publicly owned by a consortium of local authorities, chose to award Amazon the contract to provide its digital marketplace after the UK branch of Amazon EU was the only company to submit a compliant expression of interest.
The new e-procurement platform will allow participating schools, social care services, local governments and emergency services to buy goods through a single online marketplace and will help YPO expand its offering.
It is unclear whether Amazon will build a stand-alone marketplace for YPO, or if the marketplace will be integrated into Amazon’s existing business to business platform.
YPO confirmed Amazon Business was the successful bidder but declined to give any further information as the final contract had not yet been signed.
However, a publicly available EU transparency notice put the total value of the procurement at between £400m and £600m for a duration of up to five years.
The transparency notice said YPO issued a Prior Information Notice (PIN) – which sets out a buyer’s purchasing intention before a tender process – in May, and chose to enter into a contract with Amazon after the tech giant was the only firm to submit a compliant expression of interest. It also said YPO believed Amazon to be “the only viable contractor currently operating in the market”.
Simon Hill, managing director at YPO, said a digital marketplace was needed because the organisation was increasingly facing requirements from its customers that it could not fulfill on its own.
Hill said: “To ensure that it can provide an equally compliant route for these additional products, YPO recently followed a EU Procurement Regulations process to appoint an online marketplace partner who could supply the additional requirements and Amazon Business has been confirmed as the successful bidder.
“Whilst the process has now closed, the final contract has not yet been signed and we are therefore unable to provide any further details at this time.
“YPO is proud to have created a forward-thinking, innovative solution for its public sector customers,” he added.
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